Unit- III:

Systems, Planning and Control

System Concept- A system is an organized collection of highly integrated parts or subparts to complete a
specific purpose target.

The system has several inputs which go under certain procedures to generate particular outputs, all of
which fulfill the specified objective of the system.

Three basic concepts of the system:

The system was created or designed in a way that to complete specific predetermined objectives.

Parts and subparts of the system must have interdependence and interrelationships among them.

The goals of the organization always have high priority rather than the goals of the subsystem.

Characteristics for a System

There are five types of characteristics for a system. Such as,

1. Organization

2. Interaction

3. Interdependence

4. Integration

5. A central objective

ORGANIZATION:- This implies structure and order. It can also be defined as the arrangement of
components that help to achieve objectives. For example, Hierarchical system in a company.

INTERACTION:- This shows the manner in which each component functions with other components of
the system. It specifies there should be an interrelationship between every component of a system. For
example, the main memory holds the data that has to be operated by the ALU.

INTERDEPENDENCE- This means the components of a computer system depend on one another. Each
component should depend on other components of the system. One component depends on the input of
another component for proper functioning. The output of one subsystem is the required input for another
subsystem.

For example, A decision to computerize an application is initiated by the user, analyzed and designed by
the analyst, programmed and tested by the computer operator. None of the persons can perform properly
without the required input from others in the computer center subsystem.

INTEGRATION- It is concerned with how a system is tied together. It is more than sharing physical
components or locations. It means that components of the system work together within the system even
though each component performs a unique function.

Elements of a System:- The following are the key elements of a System :

1. Outputs and inputs
2. Processor
3. Control
4. feedback
5. Environment
6. Boundaries And Interface.

 Outputs and inputs: The major objective of the system is to produce an outputs that has value to
its user. Inputs are the elements that enter the system for processing the inputs, the outcome of
processing. Output is the result of processing. A system feeds on inputs to produce output in the
much same way that a business brings human, financial, and material resources to produce goods
and service.
 Processor(s): The processor is the element of a system that involves the actual transformation of
input into output. It is the operational component of a system. processor may modify the input
totally or partially, depending on a specification of the output. This means that as the output
specifications change, so does the processing.
 Control: The control element guides the system, It is the decision-making subsystem that
controls the pattern of activities governing input, processing and input.
 Feedback: Control in a dynamic system is achieved by feedback. Feedback measures output
against a standard in some form of cybernetic procedure that includes communication and
control. The output information is fed back to the input and/or to management for deliberation.
After the output is compared against performance standards, changes can result in the input or
 processing and consequently, the output. Feedback may be positive or negative, routine or
informational.
 Environment: The environment is the “super system” within which an organization operates. It
determines how a system should work. A system cannot exist in isolation. The system is covered
by the environment with a boundary in between the two.
 Boundaries and interface: A system should be defined by its boundaries- the limit that identifies
its components, process, and interrelationships when it interfaces with another system. Each
system has boundaries that determine its sphere of influence and control.

Types of Systems:

 Physical or Abstract: Physical system is tangible entities dat may be static or dynamic in nature.
Abstract system is conceptual or non-physical. The abstract is conceptualization of physical
situations.
 Sub System and Super System: Each system is part of a large system. The business firm is
viewed as the system or total system when focus is on production, distribution of goal and
sources of profit and income. The total system consists of all the objects, attributes and
relationship necessary to accomplish an objective given a number of constraints. Sub systems are
the smaller systems within a system. Super system denotes extremely large and complex system.
 Permanent and Temporary System: A permanent system is a system enduring for a time span
dat is long relative to the operation of human. Temporary system is one having a short time span.
 Natural and Man Made System: System which is made by man is called man made system.
Systems which are in the environment made by nature are called natural system.
 Deterministic and Probabilistic: A Deterministic system is one in which the occurrence of all
events is perfectly predictable. If we get the description of the system state at a particular time,
the next state can be easily predicted. Probabilistic system is one in which the occurrence of
events cannot be perfectly predicted.
 Man-made Information System: It is generally believed that the information reduces
uncertainty about a state or event. An information system is the basis for interaction between the
user and the analyst. It determines the nature of relationship among decision makers.
 General model of system

Entropy- ‘Entropy’ - Systems fall into disorder over time as the environment they operate within
changes. Entropy makes maintenance an important and valuable activity.
Josh Kaufman Explains ‘Entropy’
Entropy is the natural tendency for complex systems to degrade over time. Systems that remain
operating over long periods of time require active maintenance and improvement. Entropy is everywhere.
Without adequate nutrition, movement, and oxygen, your health will suffer. Roads need to be resurfaced
every few years or they’ll develop cracks, bumps, and potholes. Software needs to be updated and
patched or it will stop functioning as computers are updated and connected systems change.
Houses need to be repainted, refinished, and refurbished periodically to keep them in good condition.
Entropy makes maintenance a necessary and valuable activity.
In most organizations, creating something new is a high Social Status activity, while maintaining existing
systems is considered a lower-status activity.
That’s a huge mistake: the organization is only as strong as its existing systems, which sustain its ability
to function. Devoting Attention and resources to maintaining and improving those systems is not only
important, it’s critical for long-term operation and preserving value over time.

System concept applied to MIS.

Concept- The MIS is an idea which is associated with man, machine, marketing and methods for
collecting information’s from the internal and external source and processing this information for the
purpose of facilitating the process of decision-making of the business. Management information system is
an integrated set of component or entities that interact to achieve a particular function, objective or goal.
Therefore it is a computer based system that provides information for decisions making on planning,
organizing and controlling the operation of the sub-system of the firm and provides a synergistic
organization in the process.

The scope and purpose of MIS is better understood if each part of them is defined individually, thus

1. MANAGEMENT: Management has been define in process or activities that describe what
managers do in the operation for their organization plan, organize, initiate and control operations.
They plan by setting strategies and goals and selecting the best course of action to achieve the
goals. They organize the necessary tasks for the operational plan, set these tasks up into
homogenous groups and assign authority delegation; they control the performance standards and
avoiding deviation from standard.
2. INFORMATION: Data must be distinguished from information and the distinction is clear and
important for present purpose. Data are facts and figures that are not currently being used in a
decision-making process and usually are taken from the historical records that are recorded and
filled without immediate intent to retrieve for decision-making. Information consists of data that
have been retrieved, processed or otherwise used for information or interference purpose,
argument or as a basis forecasting or decision-making regarding any business unit.
3. SYSTEM: The system can be described as a set of elements joined together for a common
objective. A subsystem is a part of a larger system with which one is concerned. All systems for
our purpose the organization is the system and the parts (divisions, departments, functions, unit
etc) are the subsystem. The system concept of MIS is, therefore one of optimizing the output of
the organization by connecting the operating subsystems through the medium of information
exchange.

Management Information System is generally defined as an integrated user-machine

system for providing information to support operations, management and decision-making
functions in an organization. The system utilizes computer hardware and software, manual
procedure, models for analysis.
MIS (Management information system) in Planning and Control-

One of the most important supporting tool in planning and control, It is computerized integrated system
which give accurate information about the past, present and projected. It helps to do analysis on variance,
reason to enjoy success and most important to take further decision. The MIS is mostly selected and
designed in large at PMO level. This tool is integrated with all aspect of organization which has either
interconnection with or independent significance on overall business.

Monitoring and controlling has been done based on the inputs of MIS , so best uses of the tool gives
quality output in the business to improve. I see people complaining about the effectiveness of MIS.. yes
its true- “Garbage in garbage out”. It has all data recorded for future references
Concept of Control:
The term control has different connotations depending upon the context of the use of the term. In
manufacturing it refers to a Device or mechanism installed or instituted to guide or regulates the activities
or operation of an apparatus, machine, person, or system; in law it refers to controlling interest and in
management as an authority to order and manage the workings and management of an entity.

Control is a management process to aim at achieving defined goals within an established timetable, and
comprises of three components: (1) setting standards, (2) measuring actual performance, and (3) taking
corrective action.

Characteristics of Control:- Following characteristics of control can be identified:

1. Control is a Managerial Process:- Management process comprises of five functions, viz., planning,
organizing, staffing, directing and controlling. Thus, control is part of the process of management.
2. Control is forward looking:- Whatever has happened has happened, and the manager can take
corrective action only of the future operations. Past is relevant to suggest what has gone wrong and how
to correct the future.
3. Control exists at each level of Organization:- Anyone who is a manager, has to involve into control –
may be Chairman, Managing Director, CEO, Departmental head, or first line manager. However, at every
level the control will differ – top management would be involved in strategic control, middle management
into tactical control and lower level into operational control.
4. Control is a Continuous Process:- Controlling is not the last function of management but it is a
continuous process. Control is not a one-time activity, but a continuous process. The process of setting the
standards needs constant analysis and revision depending upon external forces, plans, and internal
performance.
5. Control is closely linked with Planning:- Planning and controlling are closely linked. The two are
rightly called as ‘Siamese twins’ of management. “Every objective, every goal, every policy, every
procedure and every budget become standard against which actual performance is compared.
6. Purpose of Controlling is Goal Oriented and hence Positive:- Control is there because without it the
business may go off the track. The controlling has positive purpose both for the organization (to make
things happen) and individuals (to give up a part of their independence for the attainment of
organizational goals).
Process of Control:

Following are the steps involved into the process of control:

1. Establish the Standards: - Within an organization’s overall strategic plan, managers define goals for
organizational departments in specific, precise, operational terms that include standards of performance to
compare with organizational activities. However, for some of the activities the standards cannot be
specific and precise.
2. Measure Actual Performance: - Most organizations prepare formal reports of performance
measurements both quantitative and qualitative (where quantification is not possible) that the managers
review regularly. These measurements should be related to the standards set in the first step of the control
process.

3. Compare Performance with the Standards: - This step compares actual activities to performance
standards. When managers read computer reports or walk through their plants, they identify whether
actual performance meets, exceeds, or falls short of standards.
4. Take Corrective Action and Reinforcement of Successes: - When performance deviates from
standards, managers must determine what changes, if any, are necessary and how to apply them. In the
productivity and quality-centered environment, workers and managers are often empowered to evaluate
their own work. After the evaluator determines the cause or causes of deviation, he or she can take the
fourth step— corrective action.

Importance of Control:
1. Guides the Management in Achieving Pre-determined Goals:
2. Ensures Effective Use of Scarce and Valuable Resources:
3. Facilitates Coordination:
4. Leads to Delegation and Decentralization of Authority:
5. Spares Top Management to Concentrate on Policy Making: